Court Adjourns Hearings On Price Row Between Government, ArmenTel

The first court hearing on a tariff dispute between the Armenian government and the ArmenTel telecommunications operator was adjourned until January 30 shortly after getting underway on Thursday.

The court case was brought by the Armenian Ministry of Transport and Communications which claims that the telecom monopoly acted illegally by deciding last October to more than double domestic telephone charges and defying its orders to annul the unpopular measure.

Armenia’s Economic Court ordered ArmenTel last month to stop enforcing the drastic price increase pending the outcome of the litigation that underscores long-running tensions between the Greek-owned company and the authorities in Yerevan. ArmenTel agreed to comply with the injunction on December 25 after government threats to level criminal charges against its chief executive, Georgios Vassilakis.

The court decided to adjourn the hearings after a request from an ArmenTel lawyer who argued that Vassilakis is currently absent from Armenia. “Mr. Vassilakis wanted to personally attend the first court session,” attorney Armen Ghazarian said.

The delay was criticized by Gevorg Kostanian, a lawyer representing the government side. “I see no objective grounds for postponing the session,” he said.

ArmenTel’s controversial measure, which would among other things double the per-minute charge for local phone calls to 8 drams (1.5 U.S. cents), was due to come into force on January 1. The company, which is 90 percent owned by Greece’s telecom giant OTE, maintains that it is allowed to set such a price by its operating license.

The government, however, insists that it has final say on the matter.

The court battle is unfolding on the heels of OTE’s decision last month to sue the Armenian government at the London-based International Court of Economic Arbitration for allegedly breaching the terms of its 1998 purchase of ArmenTel. The lawsuit was apparently filed in response to government plans to unilaterally strip the telecom operator of its legal monopoly on wireless phone services in Armenia and Internet connection with the outside world.

The 15-year exclusive rights were a key condition of ArmenTel’s $200 million sale. The government accuses the Greeks of abusing the monopoly which is seen by many experts as a serious obstacle to the sector’s development.